S T A T E O F N E W Y O R K
________________________________________________________________________
5683
2009-2010 Regular Sessions
I N A S S E M B L Y
February 17, 2009
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Introduced by M. of A. BRENNAN, GREENE, EDDINGTON, JAFFEE, FIELDS, HOYT,
ROBINSON, ROSENTHAL, CAMARA, PERRY, ALESSI, P. RIVERA, SCARBOROUGH,
BOYLAND, MAISEL, ESPAILLAT, HOOPER, PERALTA, CASTRO -- Multi-Sponsored
by -- M. of A. ALFANO, BENJAMIN, BING, BROOK-KRASNY, CAHILL, CLARK,
DIAZ, GLICK, GOTTFRIED, HEASTIE, JACOBS, JEFFRIES, KELLNER, LUPARDO,
MAGNARELLI, MILLMAN, NOLAN, ORTIZ, PAULIN, PHEFFER, POWELL, REILLY,
J. RIVERA, TITUS, TOWNS, WEISENBERG, WRIGHT -- read once and referred
to the Committee on Housing
AN ACT to amend the public authorities law, in relation to increasing
the bond limit of the state of New York mortgage agency for the
purpose of refinancing subprime loans at risk of foreclosure
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Section 2407 of the public authorities law, as amended by
chapter 148 of the laws of 2008, is amended to read as follows:
S 2407. Bond limits. (1) Except for notes issued in nineteen hundred
seventy and nineteen hundred seventy-one, the agency shall not issue
bonds and notes, the interest on which is not included in the gross
income of the holders of the bonds and notes under the United States
Internal Revenue Code of 1986, as amended, or any subsequent correspond-
ing internal revenue law of the United States, in an aggregate principal
amount exceeding [eight] ELEVEN billion four hundred twenty million
dollars, excluding from such limitation (a) an amount equal to any
original issue discount from the principal amount of any bonds or notes
issued, (b) bonds and notes issued to refund outstanding bonds and
notes, and (c) bonds and notes not described in paragraph (b) of this
subdivision issued to refund outstanding bonds and notes in accordance
with the provisions of the Internal Revenue Code of 1986 or the Tax
Reform Act of 1986, as amended, where such bonds or notes are not
included in the statewide volume cap on private purpose bonds under
section 146 of such code provided, however, that upon any refunding
pursuant to this paragraph or paragraph (b) of this subdivision, such
exclusion shall apply only to the extent that the amount of the refund-
ing bonds or notes does not exceed (i) the outstanding amount of the
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD07380-01-9
A. 5683 2
refunded bonds or notes, plus (ii) to the extent permitted by applicable
federal tax law, costs of issuance of the refunding bonds or notes to be
financed from the proceeds of the refunding bonds or notes. No such
bond or note shall be issued by the agency on or after July sixteenth,
two thousand nine, excluding bonds and notes issued to refund outstand-
ing bonds and notes. No more than five hundred million dollars of
proceeds of bonds or notes issued by the agency pursuant to this subdi-
vision shall be used for mortgage purposes by blending with proceeds of
bonds issued pursuant to subdivision two of this section.
(2) In connection with the issuance of bonds for the purpose of
furthering programs described in this title, the agency is authorized to
covenant and consent that the interest on any of its bonds, notes or
other obligations shall be includable, under the United States Internal
Revenue Code of 1986, as amended or any subsequent corresponding inter-
nal revenue law of the United States, in the gross income of the holders
of the bonds to the same extent and in the same manner that the interest
on bills, bonds, notes or other obligations of the United States is
includable in the gross income of the holders thereof under said Inter-
nal Revenue Code or any such subsequent law. Pursuant to this subdivi-
sion, the agency shall not issue bonds, notes or other obligations in an
aggregate principal amount exceeding eight hundred million dollars,
excluding from such limitation bonds, notes or other obligations issued
to refund outstanding bonds, notes or other obligations. No such bond,
note or other obligation shall be issued by the agency on or after July
sixteenth, two thousand nine, excluding bonds, notes or other obli-
gations issued to refund outstanding bonds, notes or other obligations
and no mortgages shall be purchased with the proceeds of such bonds,
notes or other obligations after such date. The board of directors of
the agency shall establish program guidelines for purposes of bonds,
notes or other obligations issued pursuant to this subdivision. The
board of directors shall establish from time to time maximum income
limits of persons eligible to receive mortgages financed by bonds, notes
or other obligations issued pursuant to this subdivision, which income
limits with respect to one-third of the total principal amount of mort-
gages authorized to be so financed shall not exceed one hundred twenty-
five percent of the latest maximum income limits permitted under the
Internal Revenue Code of 1986, as amended, for mortgagors financed by
mortgage revenue bonds, with respect to one-third of such principal
amount authorized to be so financed, shall not exceed one hundred thir-
ty-five percent of such income limits, and with respect to one-third of
such principal amount authorized to be so financed, shall not exceed one
hundred fifty percent of such limits.
(3) The fixing of the statutory maximums in this section shall not be
construed as constituting a contract between the agency and the holders
of its bonds or notes that additional bonds and notes may not be issued
subsequently by the agency in the event that such statutory maximums
shall subsequently be increased by law.
(4) THE THREE BILLION DOLLARS ADDED TO THE BOND CAP PURSUANT TO A
CHAPTER OF THE LAWS OF TWO THOUSAND NINE WHICH ADDED THIS SUBDIVISION
SHALL BE USED FOR THE PURPOSES OF REFINANCING SUBPRIME MORTGAGES AT RISK
OF FORECLOSURE. THE AGENCY IS HEREBY AUTHORIZED AND DIRECTED TO ESTAB-
LISH CRITERIA FOR DEFINING THE TERM "SUBPRIME MORTGAGE" AS SUCH AGENCY
DETERMINES TO BE NECESSARY.
S 2. This act shall take effect immediately.